The Wolf Den #381 - The Math Behind Impermanent Loss
Bitcoin Thoughts And Analysis
DAILY CHART
Boring. Bitcoin is doing very little, continuing to chops sideways and fake traders out both to the upside and downside. I see no reason to be trading this for the moment, although we do now have a retest of resistance as support at $56,425.
We have potential hidden bearish divergence now on the daily, which has confirmed on lower time frames (6 hour, 4 hour). After all of that excitement about the bullish divergences, they are now being effectively canceled, although not yet on the daily or 12 hour.
Not a huge deal, but hidden bear divs are a signal that the bullishness has ended and can signal continuation down. So be careful. Remember, the daily still has not gone oversold.
4-HOUR CHART
Rejected. Again. We have had multiple fake outs above the descending blue line, so I would really like to see a close above on decent volume. That could easily happen soon.
Clear and confirmed hidden bearish divergence, meaning the bullish divergence is finished. RSI rose far from oversold, so this could be the extent of the expected bounce on that move. Again, not a big deal, but worth watching. We need another signal now to maintain the bullish bias.
Altcoin Charts
LUNA is looking extremely good after the setup I shared yesterday, so that is worth revisiting!
ETH/BTC
This is an absurdly bullish weekly chart.
Ethereum has quietly outperformed Bitcoin for over 2 years after bottoming on the pair in September of 2019. I have been beating the drum on this trade for as long as I can remember, stating that Ethereum has seemingly far more upside with regards to price. I still believe Bitcoin is the more "important" asset for investors to focus on first, although my allocation now is roughly 60/40 BTC/ETH in my long term portfolio.
After breaking out in April and retesting long term resistance from the all time high as support, Ethereum has continued up, consolidating in a large bull pennant. Price is now attempting a breakout from this pennant. If the week closes above the descending blue line, we would consider this move confirmed. Target of the pennant is shown in red, based on the length of the flag pole. The ultimate target of the initial breakout through the black line is still the all time high, with price discovery after that.
There was a time when I had almost no followers and called the generational bottom of Ethereum on the USD pair in December, 2018, which hit $80 a week later. This should show my level of conviction in Ethereum.
I am still holding these coins, which should illustrate the power of diamond hands and simply HODLing.
Jack Dorsey Leaves Twitter
Jack Dorsey has made the difficult decision to step down as CEO of Twitter. While the resignation of a CEO is always big news, this story hits our community a bit harder, as Jack is a also a champion of the crypto industry, leaving more questions than answer as to the future relationship between Twitter and Bitcoin.
That said, this is not the end of the world.
Tim Cook replaced Steve Jobs and Apple remains the largest company on the planet.
Steve Balmer replaced Bill Gates and Microsoft is the second-largest company in the world.
Mark Palmer replaced Phil Knight and Nike is still the greatest shoe company in existence.
We shouldn't expect much to change at Twitter, but the feeling is different. Twitter is still poised to do great things and Jack will continue to push the pace for a more connected and financially inclusive 21st century. It will be exciting to see where he channels his efforts in the future. #ThankYouJack.
MicroStrategy Buys The Dip
MicroStrategy is relentless and boy is it fun to watch. History will prove Michael Saylor to either be a genius or fool, with very little room for interpretation in between. You know which side I think is more likely.
In our own way, we are all Michael Saylor, taking a risk on an asset that the world has yet to accept and adopt.
I sound like a broken record here, but this proves that timing the bottom isn't important! As rich and connected as Michael Saylor is, he has never concerned himself with timing the bottom and neither should you. Buy Bitcoin with the extra money you have, when you have it and dollar cost average.
The Wolf Of All Streets Podcast Ft. Dave Weisberger
Dave Weisberger is a Wall Street legend turned professional crypto builder. Dave went in-depth on how algorithmic trading works in the complex crypto market. Beyond describing his unique algorithmic style, Dave took a deep dive into the macro drivers in our market, including the ETF’s underpinnings, the SEC’s desires, and the hottest trends. If you’re looking for either a macro or micro market edge, this is your episode.
In this episode, Dave and I discussed:
Traders Vs. Algorithms
Executing Trades Vs. Analyzing Trades
Bitcoin’s Macro Picture
The Truth Behind The Bitcoin Futures ETF
Pension Funds And Endowments
What Is The SEC Up To?
Tokenized Tesla Stock
Will The Bull Run Resume?
Can DAOs Fail?
Moving In And Out Of Trends
How To Get A Trading Edge
This episode is sponsored by: AMBER GROUP, HBAR FOUNDATION, and HORIZEN
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The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this e-mail constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.